W. Carl Kester

George Fisher Baker Jr. Professor of Business Administration

W. Carl Kester is the George Fisher Baker Jr. Professor of Business Administration at Harvard Business School. A member of the faculty since 1981, he has served as Deputy Dean for Academic Affairs (2006-2010), Chairman of the Finance Unit (2005-2006), and Senior Associate Dean and Chairman of the MBA Program (1999 to 2005). He teaches corporate finance in both the School’s MBA and Executive Education programs.

Under Professor Kester's leadership of HBS's academic programs, a new course on leadership, corporate accountability, and business ethics, and another on entrepreneurial management, were introduced into the MBA Program’s first-year required curriculum; the required finance curriculum was redesigned; and the elective curriculum in the Program’s second year was rebalanced and expanded to improve course development opportunities for faculty and course selection options for students. The MD/MBA, MBA/MPP and MBA/MPA-ID joint degree programs between HBS and Harvard Medical School and Harvard’s Kennedy School of Government, respectively, were also created and launched under his supervision.

In addition to his work at HBS, Professor Kester has chaired the Harvard University Advisory Committee on Shareholder Responsibility, and served on the Harvard University Health Plans Subcommittee, the Harvard University Committee on Calendar Reform, and the Harvard University Employees Credit Union Board of Directors. He is currently a member of the Committee to Visit Harvard Medical School and School of Dental Medicine, which reports to the University's Board of Overseers.  Professor Kester is a member of the advisory boards for the IESE Business School of the University of Navarra located in Barcelona, Spain; the IPADE Business School in Mexico City, Mexico; and the international advisory committee for a consortium of business schools in the Andean region: INALDE (Colombia); IDE (Ecuador); and PAD (Peru).

Professor Kester’s research and course development focuses on international corporate finance and corporate governance. He is the author or co-author of numerous case studies and articles on these topics. His book, Japanese Takeovers: The Global Contest for Corporate Control, which is a comprehensive field study exploring the Japanese M&A wave of the 1980s and 1990s, was the winner of the O’Melveny & Myers Centennial Grant award. Since 1992, Professor Kester has been a co-editor of the leading volume of finance cases used worldwide, Case Problems in Finance (Irwin/McGraw-Hill), now in its twelfth edition, and Case Problems in International Finance (Irwin/McGraw-Hill). His research has been presented to academic and corporate executive audiences throughout North America, Asia, Europe, and Latin America. Among these are the Council on Foreign Relations, the Financial Executives Institute, the Royal Institute of International Affairs, the Shanghai Stock Exchange, The Strategic Planning Society, the U.S. Securities and Exchange Commission, the U.S. Senate Judiciary Committee, and the World Economic Forum. 

Professor Kester’s consulting activities have involved him with a wide variety of organizations on finance-related topics such as corporate valuation, capital budgeting, real option valuation, and mergers and acquisitions. He has worked with many corporations including J.P. Morgan, IBM, G.E. Capital, Merck & Co., the National Football League, the Standard Chartered Bank, the World Bank, and Xerox Corporation, among others. He is an independent trustee of the BlackRock Closed-End Mutual Funds Complex which consists of approximately 90 funds with combined assets under management in excess of $40 billion. From 2005 to 2008, he was also an independent trustee of Access Capital Strategies Community Investment Fund, Inc., a closed-end mutual fund that enables financial institutions to invest in loans made in low-income areas in such a way as to qualify for Community Reinvestment Act credits. Professor Kester served as a trustee (1988-2002), and as President of the Board of Trustees (1999-2002), of the Nashoba Brooks School, an independent school for boys and girls (pre-school through grade 3) and girls (grades 4 through 8). As Board President, Professor Kester was responsible for developing the School’s long-range plan, and overseeing the School’s first capital campaign and a major expansion of its facilities. He currently serves as a Trustee for Bentley University and as a member of the Board of Governors of the Handel and Haydn Society, a Boston-based musical society featuring an internationally recognized chorus and period instrument orchestra playing historically informed baroque and classical music.

An economics graduate of Amherst College (summa cum laude, Phi Beta Kappa), Professor Kester also holds advanced degrees from Harvard Business School (MBA, Class of 1977), and the London School of Economics and Political Science (M.Sc.). He received his Ph.D. in Business Economics from Harvard University’s Graduate School of Arts and Sciences, where his doctoral thesis, Growth Options and Investment: A Dynamic Perspective on the Firm’s Allocation of Resources, was the winner of the Advanced Management Program Thesis Fellowship prize. Professor Kester is a member of the Council on Foreign Relations, the American Finance Association, and the Financial Management Association.

Professor Kester resides in Concord, Massachusetts with his wife, Jane.  They have three adult children: Kelsey, Eric and Kirsten.

  1. Case Problems in Finance

    The leading volume of finance cases used worldwide, Case Problems in Finance presents real business situations that pose debatable alternative courses of action. The cases contain problems that can be narrowed but not always settled by the usual techniques of financial analysis. The cases are grouped by major topics: financial analysis and forecasting, cost of capital, working capital management, capital budgeting, dividend policy, debt policy, financial execution, and mergers and restructuring.

  2. HBS Case: FX Risk Hedging at EADS

    In 2008, EADS, the European aerospace group that owns Airbus, was faced with the decision of how best to hedge a large and growing mismatch between its dollar revenues and its euro manufacturing costs. Specifically, the company needed to decide if it would continue hedging primarily with forward contracts, but in much higher volumes and at increasingly unfavorable rates, or to break with past practice and begin using foreign exchange option contracts. The decision would have consequences for EADS' profitability, cash flow, and its ability to fund strategic investment programs crucial to its ability to remain competitive with Boeing. Students must address questions concerning the proper way to measure foreign exchange exposures, the objectives of a rational risk management policy and program for a company like EADS competing in a duopoly with Boeing, the differences between hedging with FX options versus FX futures, counterparty risk, and hedge accounting, among other considerations.

  3. Preparing High-Earning Athletes for their Post-Play LIves

    The average NFL player makes upwards of a million dollars a year. Even rookies are guaranteed a minimum of $325,000, which is seven times the average starting salary of a college grad. It’s a lot of money, but with the career of an NFL player averaging just three-to-four years, the window for such earnings is small. With this in mind, a few years ago the NFL and the NFL Players Association reached out to a handful America’s top business schools to launch a program that would help prepare players for life after football. Emily Rooney talks to Denver Broncos kicker Steve Hauschka and Harvard Business School Professor Carl Kester, who helped design Harvard’s version of the program and is the director of the NFL Business Management and Entrepreneurial Program.